Abercrombie & Fitch (NYSE:ANF) soared in early trading after the teen apparel retailer reported a surprise adjusted profit and better-than-expected sales in its fiscal second quarter, buoyed by demand for Hollister and Abercrombie kids brands.
Shares gained as much as 15.8% to $19.98 in New York premarket on Wednesday. The stock had lost 40% since the beginning of the year through Tuesday.
Net loss was $0.8mln, or a penny per share, in the three months ended August 1, from net income of $12.9mln, or $0.17 per share, the New Albany, Ohio-based company said in a statement on Wednesday.
Adjusted profit fell to $0.12 per share. Thirty-one analysts, on average, had predicted a loss of $0.04 per diluted share, according to Capital IQ.
Second-quarter sales fell 8% to $817.8mln, also topping the Wall Street consensus of $811.5mln.
Same-store sales fell 4% in the second quarter, better than the 8% drop reported in the first quarter.
"We delivered a meaningful sequential improvement in comparable sales, stabilized gross margins and achieved significant expense reductions," Executive Chairman Arthur Martinez said in the statement.
“We made good progress in Hollister and abercrombie kids, but more modest progress at Abercrombie & Fitch.”
Moving forward, Abercrombie & Fitch expects further comparable sales trend improvement, skewed towards the fourth quarter.
The company plans to open 15 full-price stores in fiscal 2015 in the key growth markets of China, Japan and the Middle East, six full price stores in North America and ten new outlet stores in the U.S.
The company also anticipates closing 60 stores in the U.S. during the fiscal year through natural lease expirations.